U.S. Stocks Off to a Weak Start
Updated from 9:13 a.m. EDT
Stocks were sulking at the open Thursday, as the latest weekly labor data revealed an uptick in unemployment. Traders were also waiting for the House of Representatives to follow up on the Senate's recent passage of a $700 billion
for financial firms.
The
Dow Jones Industrial Average
shed 63 points to 10,746, and the
S&P 500
was losing 9.8 points to 1151. The
Nasdaq
was slipping 16 points to 2053.
After the close of Wednesday's trading, the Senate passed the bailout with a 74-25 vote. The House of Representatives had rejected an earlier version of the proposal on Monday, and the stock market responded with one of its worst performances in recent memory.
In an attempt at offering additional support to the stock market, the
Securities and Exchange Commission
extended through Oct. 17 a ban on short sales of financial stocks. The original ban had been slated to expire today.
Meanwhile, Swiss bank
UBS
(UBS) - Get Report
announced it would net a small third-quarter profit. Such an achievement would break a four-quarter losing streak for
.
Bank of America
(BAC) - Get Report
, which agreed on Sept. 14 to buy
Merrill Lynch
(MER)
, said Merrill Chairman and CEO
John Thain
will join BofA as president of global banking, securities and wealth management in the combined firm. Current president of global corporate and investment banking Brian Moynihan at BofA will remain in a newly created position, the company said.
Elsewhere, the
Financial Times
reported that private equity firm
Kohlberg Kravis Roberts
, together with French electric company
EDF
were working on a
for
Constellation Energy
(CEG)
.
In the technology space,
Reuters
said Japanese firm
Fujitsu
was in discussions with data-storage company
Western Digital
(WDC) - Get Report
about a potential sale of
.
General Electric
(GE) - Get Report
, which on Wednesday announced plans for an offering of $12 billion in common stock, may price shares as low as $22.25, according to a
Bloomberg
report.
, CEO of
Ford
(F) - Get Report
, said that the automakers would continue to face a tough global market until 2010 and added that his company would not be filling for bankruptcy.
Several companies reported earnings between Wednesday's and Thursday's sessions. Agricultural products maker
Mosaic
(MOS) - Get Report
said it made a profit that surged to $2.65 a share from 69 cents year over year. Hotel operator
Marriott
(MAR) - Get Report
reported declining profit and warned that 2009 would be a tough year.
Beverage concern
Constellation Brands
(STZ) - Get Report
, meanwhile, swung to a quarterly loss due to restructuring charges.
As expected, the European Central Bank kept its interest rate unchanged at 4.25% amid a dual threat of high inflation and an economic slowdown.
Looking at economic data, the Department of Labor said that initial jobless claims for the week ended Sept. 27 rose by 1,000 to 497,000, the highest unemployment rate since 2001. A bit later, the Census Bureau is due to announce its estimates on August factory orders.
In commodities, crude oil was down $2.55 to $95.98. Gold was losing $26.90 at $860.40.
Longer-term U.S. Treasury securities were higher in price. The 10-year was up 10/32 to yield 3.7%, and the 30-year was gaining 24/32, yielding 4.17%. The dollar was stronger against the euro and pound but falling vs. the yen.
Overseas, European exchanges were advancing, while
. The FTSE in London and the DAX in Frankfurt were up, and the Hang Seng in Hong Kong finished on the upside. Japan's Nikkei ended its session with losses.
